As new franchisor, you may find the nature of your relationship
with your franchisees to be unique and even, on occasion, daunting.
While you have the right and the obligation to enforce system
standards, your franchisees often view themselves as an independent
business (which they are) with the ability to call their own shots
(which they are not). And while the relationship is contractual in
nature, if you are ever forced to bring out the contract, the
relationship is already in jeopardy.

Thus, the franchisor must pay particular attention to the
franchisor-franchisee relationship from the very start if he or she
is to create a long-term and mutually prosperous undertaking.

The Nature of the Relationship

Time and time again, we have often heard people compare the
franchisor-franchisee relationship to that of a marriage. They will
talk about the "honeymoon" period and how the franchisor
and franchisee are in "partnership" together for a common
purpose. And while this analogy may have some merit, our feeling is
that a marriage is exactly what the franchise relationship should
not be.

When we think of marriage, we think of a joint venture
relationship. In a joint venture, there are partners. Because of
the relatively equal footing of the "partners," the
typical joint venture starts out with a negotiation--and is often a
series of ongoing negotiations. Like a marriage, there are the
"who does the dishes" issues, and then there are the more
serious issues, such as money. Because each joint venture is
unique, every one of these issues is usually subject to
negotiation.

Because a joint venture partner typically is compensated based
on how much money goes to the bottom line, one concern that most
"spouses" have is how the accounting gets completed. On a
one-off basis, this is fairly easy to monitor. But on a massive
scale, it is almost impossible. And when your joint venture spouse
does cheat on you, it can become a battle among equals in divorce
court. In fact, that is one of the big differences we find between
franchising and joint ventures.

Unlike partnerships, franchising is much more like a
parent-child relationship. The franchisee, like the child, will go
through a variety of growth phases during the course of their
life.

When children first come on the scene, they are typically very
dependent on their parents, relying on them for the education and
training that will allow them to survive in this world. And as they
grow older, they become less dependent, and you begin to allow them
some latitude--first playing in the yard and eventually crossing
the street on their own. As they get older still, they will begin
to test the boundaries of their relationship, pushing a little
around the edges, trying to change or influence the system that you
have set for them--and perhaps breaking some of the rules. But they
still live in your house, and what you say goes. It is simply a
question of how forcefully you choose to put your foot down.

How to be a Good Parent

When I was young, I remember being envious of one of the kids on
my block. Mike's parents were rarely home, and when they were,
they let him do whatever he chose. At 15, we would sneak over to
Mike's house and drink beers and smoke cigarettes. I thought he
had the best parents in the world. But when my mother found out, I
was grounded for a month.

Before I had served my mother's "sentence," Mike
had found his way into a real sentence--at a juvenile detention
center. And I began to understand that sometimes being a great
parent means you cannot be a good friend.

Likewise, a franchisor needs to start by establishing the
boundaries of the relationship. It is important that the franchisee
understand that your first role as "guardian" is to guard
the system and the brand so all franchisees can continue to thrive.
Thus, one of your most important roles as a franchisor is that of
disciplinarian. To do that, you need to clearly communicate the
rules and your intention to enforce them from the start.

At the same time, it is important to understand that, as a
franchisor, discipline can no longer be meted out the way you may
have when you owned all your operations yourself. If you try to
give a franchisee the "it's my way or the highway"
speech that worked so well before, you'll quickly find yourself
with alienated franchisees--the first step on the road to real
trouble.

Franchisees are business owners, and as such, require you to
communicate with them in a professional manner. Being firm with
franchisees, as opposed to managers, also means providing them with
an explanation for your various "requests." Most
franchisees have a key desire for their opinions to be heard. A
franchisor should thus avoid making decisions in a vacuum and
providing direction to franchisees without a clear explanation of
why the direction is being given.

Effective Communication is the Key

The key to being a good franchisor starts with communication.
And that means more than the occasional newsletter and a visit from
the field representative.

In today's technology-centered society, it is all too
tempting to rely on the internet for all our communications. But in
a franchise context, that would be a big mistake. All too often, we
have seen well-intentioned e-mails ignite a firestorm when they are
misinterpreted.

Relationships are built with dialogue, so it's important
that you encourage dialogue in every aspect of the relationship.
Good franchisors are careful to create multiple venues where
constructive dialogue will occur. Annual conventions, regional
meetings and advertising councils all provide for this two-way
communication.

The accessibility of your senior staff is also vital. I have
known the senior executives of some fast-growing franchisors who
will not go home for the night until they have personally returned
every franchisee's call.

One of the most important tools at a franchisor's disposal
is the franchise advisory council. As the franchisor, creating this
council not only allows you to control the agenda, but also assures
you a voice on it. The last thing you want to do is find out your
franchisees have formed an organization without you-that's
usually a sign something is wrong and they have excluded you from
the process of resolving the grievance. Whatever comes next is
usually not pretty.

To be effective, the communication needs to be more than
frequent. It needs to be honest. While there are some things you
may choose not to share with your franchisees, the key to a
long-term sustained relationship is trust. And trust starts with
openness and honesty. Get caught in a lie once, and you have
destroyed that trust forever.

Lastly, to be effective, you have to genuinely care about the
success of your franchisees. Good franchisee relationships start
with a franchisor that is, first and foremost, committed to
franchisee success. That commitment, more than anything else, needs
to permeate the franchisor organization at every level.

If your franchisees do not sense your commitment, the
relationship can quickly become adversarial. If, on the other hand,
your franchisees see you breaking your back to help them achieve
their success, there is almost nothing they won't do for
you.

Mark Siebert

Mark Siebert is the CEO of the iFranchise Group, a franchise consulting organization since 1998. He is an expert in evaluating company franchisability, structuring franchise offerings, and developing franchise programs domestically and inte...